Cullerton dismisses union tax proposals to support pensions

Cullerton sponors pension reform bill

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By Doug Finke

Star Courier - Kewanee, IL

By Doug Finke

Posted Feb. 6, 2013 at 8:15 AM

By Doug Finke

Posted Feb. 6, 2013 at 8:15 AM

Springfield

Illinois Senate President John Cullerton Monday largely dismissed a proposal floated by public employee unions to close business tax breaks and raise other taxes in order to meet the state’s pension obligations.

Speaking to the editorial board of The State Journal-Register, Cullerton said a change in pension benefits is also necessary to solve the state’s pension funding problems.

Cullerton is the sponsor of Senate Bill 1, which incorporates two separate pension reform plans into one bill.

Both of those plans include reductions in cost of living adjustments to pension benefits.

We Are One Illinois, a coalition of public employee unions, is resisting any change to pension benefits.

Instead, it has proposed to have workers contribute more toward their pension plans and that lawmakers enact tax changes the unions say could produce $2 billion for pensions.

“This notion of having to have no sacrifice from the pensioneers and have us just raise taxes and then spend it on them ...,” Cullerton said. “What if we had $2 billion in new revenue? Why not do a capital bill? Why not spend more money on human services or pay old bills?”

Nonetheless, Cullerton said he would have a representative at a union-sponsored summit on pension reform to be held later this month. House Speaker Michael Madigan, D-Chicago, issued a blistering letter to We Are One Illinois last week, saying the summit should have been held years ago and accusing the unions of offering “no cooperation” on the issue of pension reform.

Like Madigan, Cullerton said unions have been included in pension reform talks, particularly last spring.

“It’s frustrating when they pretend like we weren’t meeting,” Cullerton said. “We were meeting at the (Executive) Mansion.”

He also singled out Henry Bayer, executive director of the American Federation of State, County and Municipal Employees, for blaming lawmakers for underfunding pensions.

“He forgets about the fact he was negotiating what some would say were generous contracts eating up the money instead of putting it in the pension fund,” Cullerton said.

The relationship between legislative leaders and public employee unions is strained, Cullerton said, “because the unions are opposed to any changes in the law that’s going to go anywhere toward solving the problem.”

The offer by unions to have employees pay 2 percentage points more of their salaries toward pensions would generate only a fraction of the $66 billion to $88 billion that would be saved by his plan, Cullerton said.

His plan would force employees and retirees to choose between their current pension COLAs or state-subsidized health insurance.

AFSCME stood by the union plan.

“The plan would free up $2.35 billion a year, more than the value of any of the pension cuts lawmakers have proposed,” AFSCME spokesman Anders Lindall said in a statement.

Page 2 of 2 - “No other group has volunteered anything to help solve the problem. The union coalition is simply saying that retirees should not be harmed, workers can’t do it alone, and walking away from the debt they are owed is irresponsible and wrong.”

Cullerton said he is not yet ready to push for passage of Senate Bill 1, but will do so soon.

“We have to start educating our own members,” said Cullerton of the 16 new senators. “They aren’t familiar yet with the crowding out of the budget.”

Some people say the state constitution should be changed to allow Illinois to impose a graduated income tax rather than the flat version it has now.

A graduated tax would be fairer and raise additional revenue, they argue.

Cullerton, though, said it is possible to achieve the effects of a graduated tax without changing the Constitution. That could be achieved by increasing breaks available to lower income taxpayers while raising tax rates, he said.